A Pitstop On The Information Super Highway

New Home Sales Plunge by 9 Percent

December 28th, 2007 Posted in Breaking News

Sales of new homes plunged last month to their lowest level in more than 12 years, a grim testament to the problems plaguing the housing sector.

The Commerce Department reported Friday that new-home sales tumbled by 9 percent in November from October to a seasonally adjusted annual rate of 647,000. That was the worst showing since April 1995.

The median sales price of a new home dipped to $239,100 in November. That is 0.4 percent lower than a year ago.

Over the last 12 months, new-home sales nationwide have tumbled by 34.4 percent, the biggest annual slide since early 1991.

That market has been suffering through a severe slump following five years of record-breaking activity from 2001 through 2005. Sales turned weak as did home prices. The boom-to-bust situation has increased dangers to the economy as a whole and has been especially hard on many homeowners.

Foreclosures have soared to record highs and all indications show the numbers will keep rising.? A drop in home prices left some people stuck with balances on their home mortgages that quickly exceeded the worth of their home.? Many home buyers were devastated as low introductory teaser rates on their mortgages jumped to much higher rates, which they couldn’t afford.

With credit now harder to get to finance a home purchase, the problems in the housing market have grown worse and unsold homes have piled up.? The problems are expected to persist well into 2008.

Analysts believe that the housing and credit troubles will force consumers and businesses to tighten their belts, causing the economy to slow down.

Sorry, comments for this entry are closed at this time.